roger wrote: Quote:
Now: Monthly take-home minus rent = X
Columbus: Monthly take-home minus house payment = 2X
In that case, go for it!
I tend to agree with roger. (Cheesy nerd disclaimer: Unless X is negative, or very, very small compared to monthly income.) I thought "stretched" means much more stretched than that.
As some of you know, I've received my Green Card lately, and I plan to move to America within the next year. As a side effect of this, I have read up a lot about what the best practices are in America with regard to money management. In general, I found that the most helpful online resources are www.money.msn.com
I especially like CNN's Money 101
, which addresses many of the questions you are facing (buying a house, saving for retirement, and saving for children's college education). After having worked through the Money 101 tutorial, I felt much more on top of the tradeoffs and choices you have to make about personal finances.
One sensible-sounding rule of thumb I found on one of these sites is that if you're not sure what the best tradeoff between saving and consumption is, start with the minimum amount of money you have lived on, save half of the pay raise relative to that baseline and spend the other half. I've applied this rule to my own income during the last half year and it feels like a workable yet prudent compromise. (Whether it really is, only time will tell of course.) Anyway, I thought you may find it helpful to check your budget against this rule of thumb to see how high mortage payments can be until they conflict with a sensible rate of saving.
PS: It's just occurring to me that sites like the above give 1/4 - 1/3 of net income as the standard upper limit for rent / mortage payments. I guess that's the more appropriate sanity check here.